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A report by the Carbon Trust has found that the greater use of energy storage would save the electricity system £2.4 billion a year, or around £50 a year on the average household energy bill. The savings, which the study found would accrue by 2030, were determined by analysing different future energy system scenarios.

An energy mix that concentrates on developing renewables was found to achieve 2030 carbon emissions reduction targets and still produce £2.4 billion of savings.

However, the report, which was produced over a year by the Carbon Trust and Imperial College London, also found that market reform was needed to introduce energy storage technologies into the UK market.

Storage such as pumped hydro, batteries and hydrogen storage, are needed to absorb “wrong time” energy, then release it to meet demand. They will also help support capacity constraints and balance the influx of intermittent and, or inflexible low carbon technologies onto the grid.

Andrew Lever, director of innovation at the Carbon Trust says: “Storage turns conventional knowledge on its head as it doesn’t fit neatly into existing regulatory frameworks, which have been designed around an energy system where power is supplied to consumers from large centralised power stations.

“We have now reached a stage where the technologies are looking promising, but will face challenges in deployment due to an outdated market framework.

“An urgent rethink is needed so we can address and overcome the broken value chain of energy storage, which is essential if Britain is to provide low carbon energy at the lowest cost to the consumer.”

The study was commissioned by, energy firms E.ON, SSE and Scottish Power, with backing from the Department of Energy and Climate Change (DECC) and the Scottish government.

DECC said that energy storage R&D had received more than £80 million of funding since 2012: “We are investigating the likely barriers to deployment of energy storage and possible mitigating actions, focussing first on removing regulatory barriers. We will be publishing a call for evidence in spring 2016 on this area.”